TerraNova
Climate Tech Investment Thesis | QUT Entrepreneurship Collaboration Sprint
Project Overview
Timeline: Oct 21 - 25, 2024
Team Members: Gina Heidke, Kendall McKinnon, Dr. Ricardo D’Souza, Rory Burke
Core Deliverables: The Sprint course allows students from MIT, QUT, University of Auckland, and NUS to collaborate on the cross section between VC and climate tech. The team crafted an Executive Investment Report that outlines the problem and opportunity, strategic rationale, technology approach, economics and returns, key risks, and impact; and an Investor Pitch Deck showing policy and market context, roadmap and milestones, headline unit economics, and go-to-market story.
Executive Summary
For this project, our team produced a decision-ready investment narrative and model evaluating policy fit, technology readiness, market pathway, capital requirements, key risks, and measurable climate/impact outcomes. Assigned the solar energy vertical, we selected Australia as our jurisdiction and developed an investable thesis for space-based solar power (SBSP) that Australia can deploy to accelerate decarbonization, stabilize the grid, and catalyze a domestic space/climate-tech ecosystem.
TerraNova is a venture investment thesis advocating for an Australian SBSP ecosystem. The concept: deploy a constellation of LEO satellites that capture solar energy and transmit it via near‑infrared (near‑IR) lasers to ground receivers colocated with existing solar farms, turning intermittent PV capacity into dispatchable, baseload power. The thesis aligns with Australia’s net‑zero ambitions, leverages strong federal policy tailwinds, catalyses a domestic space industry, and targets attractive, patient‑capital returns.
Problem Statement & Opportunity
Australia must replace nearly half of its current power mix, which still relies on coal for baseload generation. Alternatives such as geothermal and hydropower are limited by geography, and there is little appetite for nuclear, leaving the system exposed to the intermittency costs of wind and solar at higher penetrations. Intermittent renewables alone risk over‑generation at noon and shortfalls at peak—an imbalance illustrated by Western Australia’s “duck curve” (midday trough, steep evening ramp). Remote communities also face persistent energy‑access challenges. SBSP directly addresses these constraints by delivering clean, round‑the‑clock power and reducing the grid volatility associated with over‑generation and storage cycling by moving solar collection above the clouds. A LEO constellation harvests sunlight continuously, converts it to electromagnetic energy (near‑IR lasers), and beams it to retrofit receivers at existing solar farms, turning intermittent PV into dispatchable, baseload‑like power.
Why Australia, Why Now
Australia offers a rare combination of mature solar infrastructure, large land area for siting receivers, and national policy momentum toward on‑shore clean‑energy manufacturing to diversify away from coal. The national agenda includes the Future Made in Australia Bill (2024) with a $1.7B Innovation Fund and $1B Solar Sunshot Initiative, plus a $65B Capacity Investment Scheme embedded within a broader $22.7B policy package. A National Renewable Energy Supply Chain Action Plan (2024) and $91M in workforce programs further de‑risk execution and talent supply. Together, these initiatives create a favourable environment for scaling SBSP and related supply chains, making Australia a strategic rationale, policy, and location fit.
Technology Overview
SBSP collects solar energy in orbit—unconstrained by weather or diurnal cycles—then beams it to Earth where receiving stations convert it back to electricity and feed the grid or co‑located users. Our thesis focuses on a 1200–1500 km LEO constellation transmitting near‑IR light to terrestrial solar farms, effectively extending their output into the night and stabilising local grids. Current Technology Readiness Level (TRL) sits around 5–6; moving to TRL 7–8 requires integrated prototypes and grid‑coupled demonstrations. Our review of techno‑economic analyses indicated an LCOE of $50–60/MWh, below many dispatchable alternatives and with lifecycle emissions lower than terrestrial PV alone under the proposed architecture. Debris risk is mitigated via orbital selection outside high‑density fields and is already priced into LCOE assumptions.
Market analysis
Component TRLs and adjacent maturity enable near‑term demonstration. The global SBSP market is projected to exceed $1B by 2031, while Australia’s decarbonization represents a $435B economic opportunity to 2050, suggesting strong demand‑side pull for low‑carbon, firm power.
Investment Thesis & Justification
We framed TerraNova’s investment posture around clear rules: back technologies that align with national objectives, can be developed domestically and scaled, and solve urgent market needs (coal displacement, grid stability, energy access). Key risks including technical deliverability, regulatory approvals, and market adoption, are mitigated via phased development, early regulator engagement, and commercial commitments from energy buyers before scale‑up.
Grid value: Continuous, dispatchable clean energy that flattens the duck curve and reduces over‑generation curtailment costs.
Capital leverage: Policy incentives (grants, supply‑chain plans, capacity contracts) crowd in private capital and shorten the path from prototype to PPA.
Industrial strategy: SBSP manufacturing, integration, and operations stimulate space + climate‑tech jobs and exports.
Social license: Target to direct ~20% of delivered energy to underserved, coal‑reliant, or disaster‑affected communities.
Capital Plan, Fund Cycles & Expected Returns
The roadmap anticipates $21B of capex over 10 years for R&D, satellite manufacturing, launch services, and receiver retrofits, plus $200M/year opex for operations and maintenance. Returns accrue over the medium to long term (7–10 years) through power sales (PPAs), technology licensing, and potential strategic exits/IPO once orbital viability is demonstrated. We modelled three financing phases: Seed (3–5 years, $1B) to mature enabling tech and partnerships; Series A (5–8 years, $5B) to validate viability in orbit; and Series B (8–10 years, $15B) for multi‑satellite deployment.
Revenue model: Long‑term power sales (PPAs) to utilities and large offtakers; licensing of enabling tech; potential strategic exits in aerospace/energy.
Capex: ~$21B over 10 years for R&D, spacecraft production/launch, and ground retrofits.
Opex: ~$200M/yr for operations and maintenance.
Return profile: capital return ~10 years post‑orbit establishment; 5–10× over a 40‑year horizon with earlier strategic exits possible once bankable PPAs are secured.
Phased fund cycles:
Phase 1 (3–5 yrs, ~$1B): orbital viability demos + wraps (high‑efficiency cells, wireless power, in‑space manufacturing).
Phase 2 (5–8 yrs, ~$5B): first operational spacecraft with grid‑connected receivers.
Phase 3 (8–10 yrs, ~$15B): scale‑out of multi‑satellite constellation and PPA‑backed deployments.
Use Cases & Economics
Two anchor use‑cases shape demand:
Baseload augmentation for the national grid: SBSP beams complement daytime PV to deliver constant output, improving capacity factors without the land and storage overbuilds implied by solar‑only expansion.
Powering AI data centres: Rising compute workloads (500 MW–1 GW per campus by 2030) strain existing grids. SBSP provides off‑grid, 24/7 energy and locational flexibility to place campuses where cooling and land are optimal. Our NPV analysis illustrates the economics for an 850 MW facility at $110/MWh power prices and $50/MWh SBSP cost assumptions (10% discount rate), yielding a tNPV ≈ $3.53B over 20 years under the modelled scenario.
The cost‑benefit table further quantifies avoided grid upgrades, backup‑power savings, and carbon‑credit benefits alongside expected opex and transmission losses, underscoring why data‑centre offtake is a compelling early market.
Partners, LP Profile & Exit Pathways
The strategy targets patient‑capital LPs and climate‑tech investors, with execution supported by federal grants, university R&D consortia, energy companies, supply‑chain partners, and international agencies (e.g., NASA, ESA). Potential exits include acquisitions by aerospace/energy majors and licensing of subsystems (e.g., high‑efficiency cells, wireless power modules, in‑space manufacturing) that retain standalone value even under adverse SBSP scenarios.
LP & partner set: Climate‑tech investors, strategic energy/aerospace, Australian public co‑funding, universities, and supply‑chain partners; engagement with NASA/ESA for standards and demonstrations.
Risk & De‑Risking Strategy
Technical deliverability: Retire risk through ground‑to‑orbit pilots, progressive TRL advancement, and third‑party validation.
Regulatory: Establish a standing working group with federal/state agencies for spectrum, safety, and environmental approvals.
Environmental & safety: Laser safety interlocks, air/space traffic management, debris‑aware orbits, constellation placement outside major debris fields.
Market acceptance & bankability: Secure early offtake commitments (utilities, hyperscalers) and structure long‑dated PPAs to underwrite deployment. Secure early LOIs/PPAs from energy providers; create insurance instruments; publish transparent LCOE and life‑cycle emissions analyses.
Strategic: Preserve optionality by spinning out enabling tech (automation, advanced PV) if the full SBSP stack proves non‑viable on our time horizon.
Impact & Metrics
The thesis embeds impact KPI tracking from the start: CO₂ abatement, grid reliability, job creation, and ecosystem growth in space and climate tech. We also proposed a social‑impact allocation plus workforce development aligned with national apprenticeship programmes.
CO₂ reduction versus fossil baseload; energy security (peak‑shaving, firm renewables).
Jobs & industry growth across space manufacturing, integration, and operations.
Equity and inclusion: policy‑aligned commitment to subsidize 20% of energy toward vulnerable communities as capacity scales.
How we worked (SPRINT‑style)
We ran a focused sprint to move from problem framing to an investable concept: Understand (jurisdiction, policy, grid pain points); Define (user needs for utilities/data centers); Sketch (constellation + ground retrofit architecture); Decide (Australian location fit and fund cycles); Prototype (unit‑economics/LCOE models, PPA scenarios); Validate (risk register, policy mapping, and impact KPIs). The resulting artifacts are the basis for stakeholder buy‑in and a pilot roadmap.
Policy & location analysis: Assessed the Future Made in Australia policy suite, capacity‑investment mechanisms, and workforce programmes to articulate why Australia is the optimal SBSP jurisdiction now.
Technology & TRL synthesis: Consolidated TRL 5–6 status, near‑IR beaming architecture, and grid‑integration considerations into a coherent technical narrative and risk register.
Use‑case framing & economics: Analyzed the grid baseload and AI data‑centre use‑cases and summarised the NPV scenario and cost‑benefit evidence from the appendices.
Investment structure & LP thesis: Helped define the three‑phase capital plan, de‑risking milestones, and target LP/partner landscape.
What’s next
Formal regulatory pathway with safety case and spectrum coordination, standards & safety working group with government and industry
Lock a two‑site pilot (one PV retro‑fit, one data‑center partner) with conditional PPAs
Ground receiver prototype co‑sited with an existing solar farm
Commercial dialogues with hyperscalers for indicative offtake
Expand academic‑industry consortia to accelerate TRL 7–8 demonstrations
Build a blended‑finance stack pairing federal grants with patient private capital to hit Phase 1 milestones.
Run TRL‑7 prototype milestones with transparent, third‑party LCA/LCOE reporting to support bankability